Here's Why Some Brazilian Politicians Could Want Their Team To Lose At The World Cup

The 2014 FIFA World Cup kicks off in Brazil this week. Much has
been written about the negative economic impact that major
sporting events have on host nations.

But what about the political implications of the elections?

President Dilma Rousseff has been losing popularity as Brazil's
economic growth has slowed and concerns about higher
inflation and lower employment have been stoked.

While Rousseff is still favorite to win the election, support has
fallen to 34% from 37% the previous month, according to a
poll cited by Reuters. So many are wondering what a Brazilian
win or loss at the World Cup could mean for the incumbent.

Alejandro Arreaza of Barclays writes that the longer Brazil stays
in the tournament, the better it is for Rousseff. "If Brazil wins
the tournament, this should help lift sentiment temporarily," he
writes. "But the challenge for re-election is increasing,
especially as the economy is slowing more than expected and the
popular demand for change in policymaking is rising."

In a paper for Proceedings of the National Academy of Sciences
(PNAS) Andrew J. Healy, Neil Malhotra and Cecilia Hyunjung Mo
found "clear evidence that the success or failure of the local
team before the Election Day significantly influences electoral
prospects for the incumbent party," writes Guilherme Loureiro at
UBS.

A victory 10 days before an election gives the incumbent
government an additional 1-2 percentage point of extra votes in
presidential elections. That figure is larger for teams with a
stronger fan base. But the paper also found that in instances
when games took place more than 14 days before the elections they
had no significant impact on the election results. (Remember,
Brazil's general elections are slated to take place in October).

While this study was focused on the United States, Loureiro
writes that "provides good evidence about the mechanisms of
underlying voters’ assessments of a candidate’s performance."

In trying to see how this would impact Brazil, he looks how far
Brazil got in the last five World Cups and the changes in the
government's approval rating. His results basically imply that
"the World Cup should have no direct impact on the election."

Both Loureiro and Arreaza, however, think we should watch for a
possible spike in street protests during the World Cup.

"Street protests are once again building momentum and could get
worse, especially if Brazil is eliminated early in the
competition," writes Arreaza.

A recent poll from the CNT/MDS showed that nearly 76% of voters
rejected the World Cup investment, and if the event ends up being
a failure, "it could eventually trigger a return of street
protests, as happened in mid-2013," writes Loureiro.

"Although we believe there is less room for deterioration in the
government’s popularity now than a year ago (as Dilma’s approval
rating now is supported by a harder core of PT voters), if the
World Cup proves to be a sporting failure for Brazil, it would
have the potential to tarnish the government’s image and work as
a catalyst for the revival of social protests."

So perhaps we should be watching, not for a Brazilian World Cup
victory or loss, but whether the World Cup ends up being a
sporting failure or success. And maybe, even in a football crazy
nation like Brazil, some in the opposition might secretly be
hoping for the World Cup to be a failure.